Economist Jeffrey Sachs says developed countries are not living up to their aid pledges

Professor Jeffrey Sachs is an influential economist, as special advisor to the United Nations secretary-general.

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LEIGH SALES: Professor Jeffrey Sachs is one of the world's most influential and famous economists, as special adviser to the United Nations' Secretary General. He's an expert in aid and economic development and is director of the Earth Institute at Colin Barnett in New York. Professor Sachs's latest book is 'Common Wealth' and he joined me earlier from London. Jeffrey Sachs, we just heard that one of the causes of the global food crisis is that farmers in the poorest countries can't afford to pay for seeds and fertilisers and irrigation. What is the best short term response to that? To give them seeds and fertiliser, or to give them money?

PROFESSOR JEFFREY SACHS, ECONOMIST: Oh, definitely the best thing to do would be to help them get seed fertiliser, small scale irrigation through grants initially, turning into credits after two or three or four years, as these farmers build up some assets. And thereby put them onto a basis where later on they can finance these basic inputs through regular market means. But right now they're trapped in poverty. The result is that impoverished farmers in Africa, for example, are growing about one third the food supply that they could if only they could get access to these basic inputs.

LEIGH SALES: The UN World Food Program has described the global food crisis as a silent tsunami which knows no borders sweeping the world. The word 'tsunami' implies it's something we didn't see coming. Is that the case?

PROFESSOR JEFFREY SACHS: There has been chronic hunger afflicting about a billion people on the planet for a very long time and indeed in my capacity as special adviser to the Secretary General of the United Nations I've been recommending financing for the poorest farmers, again with the special focus on Africa so they could get the fund they need to increase their productivity. But what's happened in the last couple of years, particularly the last six months, is this explosion of food prices. This has been the result of rising world demand, the failures of crops in Australia, in Europe, in the 2005, 2006 season, the diversion of crops to bio fuels, especially in Europe and the United States and the very low inventories that we have in the world. So there has been an ongoing chronic crisis, now an acute crisis which has come with these soaring food prices and all the piling up of trade barriers that have been exacerbating the run up of prices.

LEIGH SALES: You mentioned the bio fuels issue, which has been very prominent in recent days. What's your view on that, should research in that area be abandoned? Do we need to look for extra alternative energy sources, what do you think?

PROFESSOR JEFFREY SACHS: Research should be accelerated but what should be abandoned is the use of current food supplies to turn them into ethanol, especially in the United States. We're using about one third of our maize production this year for ethanol. It's a lousy bargain, it doesn't make energy sense, it doesn't make sense for CO2 emissions or greenhouse gases more generally, so environmentally it's at best a wash, probably negative and, of course, it's having this absolutely deleterious effect on food prices. So what's a bad policy is the use of a food grain for the gas tank. What a good policy would be, would be to accelerate the research on non food types of crops. For instance, switch grass or woodchips using the cellulose rather than the food grains and sugars. So this is really the problem that we've jumped ahead, partly because of the vested interests of particular farm groups and agribusiness in the United States to use what should remain in the food chain.

LEIGH SALES: Some of the effects of the things you're talking about would take a while to be felt. But in the short term we're already seeing riot in Haiti, Cameroon, Egypt, other places. Is this situation going to get worse before it gets better?

PROFESSOR JEFFREY SACHS: I'm sure that we're going to have a tough year or two, if there are more crop disturbances as is absolutely possible given the low inventories. Certainly we could be in for a very rocky ride. But I should stress, for me it's very ironic. I've been trying with a number of colleagues and with agronomists to emphasise the need to grow more food in the poor countries. This has fallen on deaf ears of our donor agencies unfortunately, who seem to be incapable of looking ahead and only reacting to a crisis and then when the crisis comes they say, "We can't do anything in the medium term, we only have to do the short term things". The fact of the matter is that if we were agile, which we could be, even from one growing season to the next, it would be possible to help large numbers, I'm talking about millions or tens of millions of farm families. Because it doesn't take more than a growing season to have a big boost of crop production, if the poor who have been excluded from the basic technologies are thereby getting these technologies available. And I'll give you one example quickly if I could, a small country landlocked in Africa called Malawi has more than doubled its crop output in the last three growing seasons, because they did take on the challenge of providing financing, a voucher ticket in essence, for fertiliser and high yield seed to their farmers and from one growing season to the next they went from essentially a famine to a doubling of the food supply. Pretty good rains, but what really helped was getting the fertiliser and the seed to the farmers.

LEIGH SALES: Even with a success story like that, though, can the world produce enough food to feed every single person, particularly given rising population issues?

PROFESSOR JEFFREY SACHS: I think these pressures are going to be with us for quite a long time to come. We really are such a big, crowded planet with so much growth, of course particularly in the Asian region with China's growth, with India's growth, that we're pushing hard not only on the food supplies, of course, but also on energy which is why we have oil prices at about $120 a barrel. On many other mineral commodities at this point. This is really a growing large world economy pressing against scarce resources. Of course, for a country like Australia, if the rains are good, this is a great boon because as a natural resource country, this is a tremendous rise of prices. What it does mean is that this relative scarcity of commodities is pushing up against the capacity of the world economy to grow right now. It will definitely be a factor in the slowdown of global growth. We have to think longer term of alternative technologies, better technologies for energy, for food supply, a lot more research. This is again, one of the areas where we've done very, very little in recent years, is actually thinking ahead to alternatives and to ways to boost the food supply and help make our food system more resilient to climate shocks.

LEIGH SALES: Professor, you talk about a time lag in which we'll with be waiting for the effects of technological change to be felt. What sort of things might happen during that period? Are you talking about conflict, wars, potential falls of government?

PROFESSOR JEFFREY SACHS: There's already been one government that has fallen from power in Haiti following food riots. There have been food riots in many other countries. I'm not predicting, because there's so much uncertainty about short term commodity price fluctuations, but if it turned out that there were more crop failures on top of our low inventory levels, food prices spiking even further, I think that there could really be violence and instability in some of the poorest places in the world. Where we see violence in general is in poverty stricken countries and we know from a lot of experience that it is hunger that is one of the most powerful impetuses to that kind of instability.

LEIGH SALES: So which other nations or areas are at most risk?

PROFESSOR JEFFREY SACHS: Certainly the poorest places in the drylands of the world. That's the African countries like Mali, Chad, Sudan in Darfur, Somalia, which is so poor and unstable it doesn't even have a national government anymore. Yemen and, of course, Pakistan Afghanistan places that are really already hot spots of the whole world. These are places that are prone to drought. There's chronic hunger and now it's all exacerbated by these global disturbances, so that the food imports can't even be financed right now. Even the World Food Program, which provides emergency relief and emergency nutrition programs can't meet its short term bills, because the price of everything has essentially doubled or more, so their budget goes only half the way. They've made an emergency appeal for food aid. I'm very worried actually that first, even that appeal won't be met, but that our governments, which are so short sighted typically, won't see beyond that to get to the food production stage, which is the only solution looking at a horizon of, say, one to five years.

LEIGH SALES: Your idea is that countries basically have to accept that the challenges we're facing face everyone and people need to work together, is that right?

PROFESSOR JEFFREY SACHS: Well, the absurd thing is we have water scarcity in Australia, in the United States, in Iraq, Afghanistan, Pakistan, Chad, this is a worldwide phenomenon. Of course there are some place s that aren't exactly in that situation, but they share a crisis, say, on energy or on other aspects of climate change. Because these are global and ecological challenges they are shared around the world. What are we doing in general? We're scrambling in war to fight for resources right now, to angle for who can be in best position in the Persian Gulf. The fact of the matter is that's not enough to meet the real needs of the world and if we scramble, if we go deeper into conflict over these resources we're really all lost. Nobody comes out the winner. Whereas there are wonderful technologies potentially that can help to open up vast few areas of resource availability for us. For instance, a vast amount of solar power that could be tapped. We do such remarkably little research in this, compared to what we spend on war, on military and so forth that it's not surprising that we're hitting these kind of walls right now.

LEIGH SALES: If I may, I'd like to put some of the views of your critics to you and have you respond. You write on the first page of the first chapter of your new book 'Common Wealth' that one of the features of the 21st century will be that the very idea of competing nation States that scramble for markets power and resources will become passé, which is what you've said tonight. What evidence do you have for that prediction given that since 1648 nation States have defined the international system and that they don't show signs of any collapse any time soon?

PROFESSOR JEFFREY SACHS: What I should be clear about is that the way the book amplifies that is by saying it's passé in the sense of actually enabling us to achieve what we want to achieve, which is peace, security and economic well being. We can't do that with competing nation States in the traditional way. And 1648 when there were less than one tenth of the world's current population on the planet and maybe 100th of the world's income on the planet, it wasn't the same situation. The analogy doesn't apply. We're a $70 trillion world economy. We are pushing up against absolute scarce limits on climate effects, on the atmosphere, on the oceans, on the water supply and on our capacity to meet food needs and so forth. If we just continue with our 1648 mindset, we will absolutely not solve these problems and they will get worse.

LEIGH SALES: I hear what you're saying that pessimism in this area is defeatist, but in Australia we have people living inside our own borders who are living in third world conditions. Indigenous Australians in remote communities who don't have basic nutrition, despite decades of Government intervention and millions of dollars. If we can't help those people inside our own borders, isn't it understandable to be pessimistic about the prospect of helping millions around the world to get out of poverty?

PROFESSOR JEFFREY SACHS: Well, I bet Australia could do better, by the way. I don't accept this view that these are inevitable, unsolvable problems. In the places I'm working, whether it's the United States or whether it's the poorest villages in Africa, there are solutions to these problems. They can make a huge difference. Farmers can grow more food. Children don't need to die of malaria or die of measles. It is possible to have roads and power come in. Nobody needs to die of their poverty in the 21st century, yet 10 million children every year die of their poverty. We haven't been following through. Is it really impossible for the rich countries to honour the very commitments that they've made to provide just 70 cents out of $100 of our income. 0.7 of one per cent to take on these challenges. Do we have to declare defeat before we've even tried to implement what we've long promised but never implemented? That would be a tragedy it seems to me, if we can't even muster the energy to follow through on our own promise to provide seven tenths of 1% of our income to try to get disease, hunger and poverty under control in the world's poorest countries, that in and of itself is a tremendous risk for ourselves, the lack of that effort. What does it tell to the world? It says, "We don't care" which is a profound danger and I also think a misrepresentation of the actual views of people in our countries.

LEIGH SALES: Professor Jeffrey Sachs we're out of time, but we thank you very much for joining us from London.